Well I put the head back on and its running. Don't laugh, but I used red RTV on the head gasket. Ok, I'm going to laugh!!! It just defies all logic that this engine would run and NOT leak anything at all. I only torqued the heads to 65 when I did the valves 5 years ago, so this time I torqued it to 70.
You guys will probably get mad at me, and think I'm crazy, but I actually took it on a drive for a couple miles, runs excellent. Left the rad cap loose. Runs quieter than it has in a long time. I have a feeling that ring broke even before Christmas, because it always had what I thought was a noisy lifter, that sound is TOTALLY gone.
I KNOW it's risky driving it, even starting it up. I'm just amazed at how quiet it is now. YOU CAN'T KILL A FLATHEAD haha.
Does this prove anything? I don't know. Maybe that I've gone stupid.
Actually I think this might prove that in an emergency, you can reuse a head gasket and it will get you home.